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Re: Withdrawal of Roth IRA Contributions

You need to file F8606 . see http://www.irs.gov/pub/irs-pdf/f8606.pdf pt III on p. 2. IRS needs to see that you aren't taking earnings which you demonstrate by showing your basis in contributions and your current withdrawals. You also need to read the instructions for certain line items if you have ...
by kaneohe
Mon Aug 18, 2014 6:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Withdrawal of Roth IRA Contributions
Replies: 11
Views: 2081

Re: Help!! Can some one explain tax loss harvesting

perhaps looking at Sch D might help. http://www.irs.gov/pub/irs-pdf/f1040sd.pdf The form is more complex than it used to be but the idea is the same. Part I reports short term gains/losses . Lines 1-3 report current yr gains/losses. Line 6 is the short term loss carryover from the previous yr. The s...
by kaneohe
Tue Aug 12, 2014 10:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help!! Can some one explain tax loss harvesting
Replies: 16
Views: 1039

Re: New savings account?

I've been w/ Synchrony (GE Retail) for 3-4 months spanning the transition to Synchrony. So far so good. They improved the m.mkt so that the yield structure is flat and not tiered as it used to be so you can keep a smaller balance there (there is a min. balance of ? 1.5K ? to avoid fees) if you want ...
by kaneohe
Fri Aug 08, 2014 10:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: New savings account?
Replies: 5
Views: 649

Re: Question re- EE Bonds

If you were at least 24 years old when you received any of the ones issued after 1989, they qualify for tax free treatment if you use them for qualified education expenses for yourself or for a dependent. http://www.irs.gov/publications/p970/ch10.html from your link: Qualified U.S. savings bonds. A...
by kaneohe
Thu Aug 07, 2014 11:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question re- EE Bonds
Replies: 18
Views: 1621

Re: Best way to handle estimated taxes on unequal income?

The estimated tax penalty is 9%, but it is applied on an annualized basis. But if you mean the "prior-year tax liability" safe harbor, it is a cliff. Underpay the safe harbor amount by a few dollars, and your entire balance due is subject to the penalty calculation. From that point on, it...
by kaneohe
Thu Aug 07, 2014 5:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best way to handle estimated taxes on unequal income?
Replies: 24
Views: 1364

Re: Best way to handle estimated taxes on unequal income?

It is also worth noting that the safe harbor is very important and very rigid in its application. Missing it by even a few dollars can subject you to the estimated tax penalty if you wind up owing at year-end. It is better to exceed the safe harbor amount, as added insurance against a math error. ....
by kaneohe
Thu Aug 07, 2014 10:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Best way to handle estimated taxes on unequal income?
Replies: 24
Views: 1364

Re: Best way to handle estimated taxes on unequal income?

Would you be able to increase your withholding enough so that in combination with your equal quarterly estimated taxes you meet the safe harbor of
100% of last yrs taxes (110% if AGI > 150K)? http://fairmark.com/estimate/howmuch.htm
by kaneohe
Thu Aug 07, 2014 12:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Best way to handle estimated taxes on unequal income?
Replies: 24
Views: 1364

Re: dividend yield when stock price change

You need to distinguish between fundamental things....like how much the dividend per share is.......and defined/derived quantities like yield which can be whatever you define it as; sometimes some definitions are more meaningful than others. Suppose you live off your dividends and would like to maxi...
by kaneohe
Tue Aug 05, 2014 8:53 pm
 
Forum: Investing - Theory, News & General
Topic: dividend yield when stock price change
Replies: 38
Views: 1263

Re: Investing for those in the 15% tax bracket

Maybe you can help educate me. Let's assume I am in the 15% tax bracket this year. I put in $100 into a Roth IRA and $100 into a traditional IRA this year and buy 1 share in each of Vanguard's Total Stock Market Index Fund. I don't touch the investments for 30 years. After 30 years, I sell the shar...
by kaneohe
Mon Aug 04, 2014 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: Investing for those in the 15% tax bracket
Replies: 38
Views: 2764

Re: Is Medigap insurance really needed?

Let me clarify my question. Will Medigap plan F cover ALL the medical expense(s) left over after medicare pays their part for covered expense(s)? Thanks Yes unless you choose the high deducible plan F. Then you have to pay the deductible first. Here's a chart comparing all the Medigap plan coverage...
by kaneohe
Sun Aug 03, 2014 9:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is Medigap insurance really needed?
Replies: 83
Views: 4132

Re: Is Medigap insurance really needed?

I could only find 2 Medigap plans that have a maximum out of pocket limit stated. For all those who chose Plan F (which appears to be the best plan but does not have a limit), is this a concern at all, or am I missing something and should not worry about that? I know MA plans have limits, but I wan...
by kaneohe
Sun Aug 03, 2014 9:52 am
 
Forum: Personal Finance (Not Investing)
Topic: Is Medigap insurance really needed?
Replies: 83
Views: 4132

Re: Confused about HSA

http://www.hsaed.com/who_can_have_an_hsa_

check this out for FSA & HSA . Apparently you can't have a full-featured FSA and an HSA at the same time ; but a limited purpose FSA is ok.
by kaneohe
Fri Aug 01, 2014 6:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Confused about HSA
Replies: 9
Views: 562

Re: "Backdoor" Roth [tax liability of traditional IRA]

see http://www.irs.gov/pub/irs-pdf/f8606.pdf which is the form which reports Roth conversions in Pt II. See the first line on p.1 which reads: Name. If married, file a separate form for each spouse required to file Form 8606. See instructions. The separate form for each spouse tracks only their indi...
by kaneohe
Fri Aug 01, 2014 12:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: "Backdoor" Roth [tax liability of traditional IRA]
Replies: 6
Views: 472

Re: Roth IRA Conversion and Medicare surtax

an interesting read: http://www.kitces.com/blog/how-ira-withdrawals-in-the-crossover-zone-can-trigger-the-3-8-medicare-surtax-on-net-investment-income/ According to this, the Roth conversion is not surtaxed (not investment income); however due to the interaction of AGI and the surtax, the Roth conve...
by kaneohe
Fri Aug 01, 2014 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion and Medicare surtax
Replies: 3
Views: 524

Re: Backdoor Roth IRA Conversion timing?

Perhaps consider this (from a link in the wiki): http://thefinancebuff.com/the-backdoor-roth-ira-a-complete-how-to.html see the section on hiding your deductible contributions contained in your IRA in your 401K (assuming the 401K will accept them). Then you can do the converesion nearly tax free. No...
by kaneohe
Fri Aug 01, 2014 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA Conversion timing?
Replies: 10
Views: 997

Re: Partial Roth conversion questions

I convert a big chunk of funds (do it in the last quarter of the year so you don't trigger quarterly taxes due before year end) and then when I'm doing taxes in the following calendar year, recharacterize the surplus, back to IRA. I am sure you can make multiple conversions throughout the year BUT ...
by kaneohe
Thu Jul 31, 2014 9:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Partial Roth conversion questions
Replies: 7
Views: 629

Re: Please confirm my back door Roth understanding

It is easier to put deductible contributions into one traditional IRA and non-deductible contributions into another traditional IRA so that when he withdraws or converts, he can calculate the taxable part easier. I don't see why it would be easier? The 8606 form calculation of the taxable part will...
by kaneohe
Wed Jul 30, 2014 2:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please confirm my back door Roth understanding
Replies: 15
Views: 1295

Re: Which is King: Income Stream or $ Invested

http://www.immediateannuities.com/

for some equivalence: variables (age now, sex,whether there is a guaranteed payout period, etc.). If you know something specific about your life expectancy that might affect decision too.
by kaneohe
Tue Jul 29, 2014 3:48 pm
 
Forum: Investing - Theory, News & General
Topic: Which is King: Income Stream or $ Invested
Replies: 52
Views: 4573

Re: How to handle a company that won't honor a warranty?

I'm trying to see if I can get a free replacement part for my under-warranty treadmill, but not having much luck so far. The treadmill is 4 years into a 5 year warranty on parts & electronics, and a month ago some of the buttons on the console stopped working so you can't actually start the tre...
by kaneohe
Tue Jul 29, 2014 2:10 pm
 
Forum: Personal Consumer Issues
Topic: How to handle a company that won't honor a warranty?
Replies: 23
Views: 1481

Re: Was ready to pull plug on Janus..until

You might want to compare after-tax return rates as well (somehow). Actively managed funds tend to have larger distributions than passive index funds........some of them non-qualified dividends or STCG taxed as ordinary income which depletes your other assets.
by kaneohe
Tue Jul 29, 2014 2:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 4012

Re: Revocable Trust Tax Treatment

from the Forbes article: Here’s why. Most trusts (NON-grantor trusts) pay tax on capital gains and accumulated income that stays in the trust, while the beneficiaries pay tax on income that is distributed to them. So trusts—even relatively small ones—will be hit with the 23.8% capital gains rate (th...
by kaneohe
Tue Jul 29, 2014 10:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Revocable Trust Tax Treatment
Replies: 9
Views: 553

Re: Rich Spouse, Poor Spouse

The only advantage I can think of is if you really are keeping finances separate, and you are being locked out of deductible tIRAs or something like that. In that case, I guess you should file separately. MFS is nearly always worse than MFJ for IRA deductions............. http://www.irs.gov/Retirem...
by kaneohe
Fri Jul 25, 2014 8:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Rich Spouse, Poor Spouse [Tax filing apportionment]
Replies: 77
Views: 5672

Re: Cost basis and mutual fund exchanges

The cost basis for each lot remains the same. However since the number of shares probably will change, you need to adjust for that. Suppose for simplicity that immediately after the exchange you have 2x as many shares. You translate each lot e.g. Lot 1= x sh Fund A to Lot 1 = 2x sh Fund B with the a...
by kaneohe
Fri Jul 25, 2014 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: Cost basis and mutual fund exchanges
Replies: 4
Views: 619

Re: How to cash in Savings bonds (from 80s)

If they are worth a lot, you may need to file estimated taxes in the year you cash them in. Shouldn't be too bad assuming the EE interest is just an add on to a "normal" year. Can probably use the safe harbor of 100 (or 110) % of last years tax and just do a bit more withholding but, as y...
by kaneohe
Fri Jul 25, 2014 1:32 am
 
Forum: Personal Finance (Not Investing)
Topic: How to cash in Savings bonds (from 80s)
Replies: 14
Views: 1636

Re: How to cash in Savings bonds (from 80s)

also,if they haven't reached full maturity, the interest accrues in 6 mo. intervals so if you cash in a day early, you might miss the last 6 mo interest. I believe the 6 mo intervals go w/ the purchase date month so if bought in July, the interest months are Jan and July and cashing in the first day...
by kaneohe
Thu Jul 24, 2014 7:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to cash in Savings bonds (from 80s)
Replies: 14
Views: 1636

Re: MAGI and Lifetime Learning Credit

Worksheet 3-1.MAGI for the Lifetime Learning Credit 1. Enter your adjusted gross income (Form 1040, line 38) 1. 2. Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 2. 3. Enter your foreign housing deduction (Form 2555, line 50) 3. 4. ...
by kaneohe
Sun Jul 06, 2014 9:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: MAGI and Lifetime Learning Credit
Replies: 7
Views: 510

Re: IRA to Roth Conversion Deadline

You can do the Roth conversion whenever you want. Depending on what you are doing, sometimes it is better to do it soon after you make the TIRA contribution.
by kaneohe
Thu Jul 03, 2014 1:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth Conversion Deadline
Replies: 5
Views: 372

Re: Found an old deposit receipt for my late wife . . .

1. Don't custodians send out Form 5498 every year for IRA accounts? That happens only if during the year assets were contributed, rolled over, converted, or distributed. If the IRA is just plugging away with reinvested dividends there is no Form 5498. Specific Instructions for Form 5498 File Form 5...
by kaneohe
Tue Jun 24, 2014 10:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Found an old deposit receipt for my late wife . . .
Replies: 27
Views: 3819

Re: Tax Bracket Management at 15%/25% Boundary

ssc.........you are correct. I misread original amt as exclusive of QDI/LTCG when it was inclusive. Thanks for clarifying.
by kaneohe
Wed Jun 18, 2014 2:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Bracket Management at 15%/25% Boundary
Replies: 33
Views: 3320

Re: Tax Bracket Management at 15%/25% Boundary

2. Make sure you understand how qualified dividends and long term capital gains are taxed. Example: if you are $4000 above the top of the 15% bracket, and have $8,000 in QDI and LTCG, then $4000 of it is taxed at 0%, and the other $4000 is taxed at 15%. And (if the rest of your 1040 is plain vanill...
by kaneohe
Wed Jun 18, 2014 12:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Bracket Management at 15%/25% Boundary
Replies: 33
Views: 3320

Re: How much do you contribute to your HSA?

[quote="Bill M" I'm somewhat AR about records. I keep all the EOB forms from UnitedHealthCare and the Dental plans (downloaded as pdf files), and also scan the insurance premium statements and other bills for deductible medical expenses. Then there is a Excel spreadsheet that ties them all...
by kaneohe
Wed Jun 18, 2014 8:31 am
 
Forum: Personal Finance (Not Investing)
Topic: How much do you contribute to your HSA?
Replies: 17
Views: 949

Re: New job: Trying to decide on tax exemptions and withhold

Here is one approach: calculate by hand your estimated income from your 2 jobs. Use a tax calculator like Taxcaster (google for it) and input your earned income and any other income you have as well as your deductions (or use standard deduction) to calculate your estimated tax for the whole year. Su...
by kaneohe
Tue Jun 17, 2014 9:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: New job: Trying to decide on tax exemptions and withholding
Replies: 3
Views: 359

Re: Remodel questions

The sales tax would be deducted instead of the state/city income tax (not property tax). Under certain conditions you can add the sales tax for materials for a major remodel to the general sales tax from the table based on income. I am not 100% sure CA falls in that category......either you pay the ...
by kaneohe
Fri Jun 13, 2014 3:29 am
 
Forum: Personal Consumer Issues
Topic: Remodel questions
Replies: 1
Views: 359

Re: HSA vs. Taxable Account

perhaps you can make a "post-tax" contribution elsewhere and deduct it on line 25 of your 1040.
by kaneohe
Tue Jun 10, 2014 7:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA vs. Taxable Account
Replies: 4
Views: 362

Re: Wiki: Tax Effects of Maximizing Roth IRA Contributions

The math Roth: 6k @ 7% = 23.2k Traditional 6k*7%*.75 = 17.34 2k*6.25%= 2000+(6724-2000)*.85 = 6015 23.34k As expected given the way the tax code works the TIRA wins. You can tweak the 6.25% number to match you estimate for the yearly tax drag but it is a pretty reasonable one. As expected contribut...
by kaneohe
Mon Jun 09, 2014 11:37 pm
 
Forum: Investing - Theory, News & General
Topic: Wiki: Tax Effects of Maximizing Roth IRA Contributions
Replies: 26
Views: 1848

Re: Estate Efficiency and Parent's RMDs

You should at least be aware of this effect on Medicare premiums as income goes higher. You may decide it is neglible or not.........
http://www.ssa.gov/pubs/EN-05-10536.pdf
by kaneohe
Sun Jun 08, 2014 8:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Estate Efficiency and Parent's RMDs
Replies: 21
Views: 1516

Re: Bank Account for Estimated Tax Payments

Does he have a local Schwab branch or something equivalent that he could link to an online bank money market account like Ally. The Ally account , I believes has no fees for normal type operations, no min balances, etc. and has limited checkwriting. Schwab will do the link and if he is willing/able ...
by kaneohe
Fri Jun 06, 2014 1:01 am
 
Forum: Personal Finance (Not Investing)
Topic: Bank Account for Estimated Tax Payments
Replies: 4
Views: 499

Re: Living trust vs will

bsteiner wrote:
Revocable trusts are appropriate in some cases, and in some states. They're common in California for reasons specific to California.
.


What are those reasons specific to CA?
by kaneohe
Wed Jun 04, 2014 10:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Living trust vs will
Replies: 26
Views: 2565

Re: GE Capital Retail Bank 5-Year 2.3% CD

any existing GE Capital Retail Bank CDs held and any new Synchrony Bank CD purchases will be aggregated for FDIC insurance calculations. That's what Schwab tells me anyway. That seems slightly strange, since someone with CDs in both places could now wind up over the insurance limit. If that's possi...
by kaneohe
Tue Jun 03, 2014 1:04 am
 
Forum: Investing - Theory, News & General
Topic: GE Capital Retail Bank 5-Year 2.3% CD
Replies: 75
Views: 8010

Re: [Cost basis method for a mutual fund?]

Look at your tax situation. If you are in 15% marginal rate, then long-term capital gains are taxed at 0% and you want to show a gain. Why??? For a given outcome (sales price), wouldn't you want to select the tax reporting that gave you the lowest result (even a loss)..........regardless of tax bra...
by kaneohe
Thu May 29, 2014 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: [Cost basis method for a mutual fund?]
Replies: 9
Views: 658

Re: Roth IRA conversion: 5 year rule question

Alan, thanks for the followup. I think I understood from your first post that the distribution and conversion are declared on the earlier year tax return and that someone might be tempted to start the 5 yr conversion clock from the earlier year when it should be started from the later year. What I w...
by kaneohe
Sat May 24, 2014 4:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA conversion: 5 year rule question
Replies: 8
Views: 955

Re: Roth IRA conversion: 5 year rule question

Alan, interesting example. Perhaps a case when knowing less might have helped....at least for the 5 yr clock. I would never have thought that the conversion would have been declared in the earlier year since it was finalized in the later year. Hopefully, though, I would have been disturbed eventuall...
by kaneohe
Fri May 23, 2014 1:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA conversion: 5 year rule question
Replies: 8
Views: 955

Re: Cost basis of stock gifts using the lifetime exclusion

Iorek wrote:Wouldn't person A rather pay LTCG tax than gift tax, and gift the proceeds?


Perhaps they would pay up to 23.8% on that but maybe B is in a lower bracket? Or maybe, as previously suggested, B might prefer to inherit it.
by kaneohe
Fri May 23, 2014 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: Cost basis of stock gifts using the lifetime exclusion
Replies: 11
Views: 681

Re: Roth IRA conversion: 5 year rule question

and for those who prefer nutshells, there is this wonderful table from the fairmark.com site by kawill (and vetted by Alan S.): (no thinking involved...the ordering rules of withdrawals considered to be contributions first, then conversions (oldest first), and finally earnings are implicit in the wa...
by kaneohe
Fri May 23, 2014 12:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA conversion: 5 year rule question
Replies: 8
Views: 955

Re: AMT Planning Strategies

Both the H&R Block tax calculator and Taxcaster do AMT. They are not full blown tax software so you may need to improvise in inputting data.
You can find them w/ google.
by kaneohe
Wed May 21, 2014 9:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: AMT Planning Strategies
Replies: 13
Views: 1360

Re: Traditional IRA to Roth Conversion Question

One important fact is missing which probably accounts for the range of answers you are getting. Do you have any other TIRAs w/ deductible contributions. If you do not and the earnings are "not significant", then you probably want to do the conversion as soon as possible to minimize the tax...
by kaneohe
Wed May 21, 2014 2:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Traditional IRA to Roth Conversion Question
Replies: 20
Views: 1368

Re: quick question about IRA->Roth transfer

If you fill out Form 8606 Pt I & II, the answer will be evident (and it isn't what you want).
by kaneohe
Tue May 20, 2014 8:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: quick question about IRA->Roth transfer
Replies: 6
Views: 427

Re: Disclaiming a Roth IRA inheritance

Why disclaim. Why not just make the sons the primary beneficiaries. Are you saying after the wife inherits from her mother, make the wife's sons her primary beneficiaries? If sons inherit mother's inherited IRA, RMDs are taken out based on mother's age which will be significantly higher than if the...
by kaneohe
Thu May 15, 2014 5:22 pm
 
Forum: Investing - Theory, News & General
Topic: Disclaiming a Roth IRA inheritance
Replies: 26
Views: 2201
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